On March 4, the US Senate issued the Congress Review Act to cancel a biden-era regulation, commonly known as a broker Defense Rule. This rule required decentralized finance platforms to share user data with internal revenue service.
The CRA is ready to cancel reporting reporting by brokers that provide regular services affecting digital assets (or simply “broker Defi Rules”). Voting was scheduled for March 5 on cancellation of the rules, but it could be later due to schedule conflicts.
According to the Cruise’s statement of Administration Policy, the rule expanded the definition of “broker”, which provides access to decentralized finance platforms to include software, effectively placed the DEFI sector under the IRS oversight.
Broker DEFI Rules pushed the DEFI platforms about their customer politics, reported gross income from transactions on platforms and other functions, and shared taxpayers details with the agency. In Cra, the Broker Defi rule is described as a compliance burden imposed on American Defi companies. Another problem with the rule is a concern for privacy.
The rule was adopted on 30 December 2024 in the last days of Biden administration, and came into effect on 1 January 2025. However, DEFI platforms were not expected to fulfill compliance obligations by 2027. Cruz and his co-operatives urged the President to sign the CRA, arguing that it would promote innovation and economic growth, rather than that it would promote economic growth rather than stability.
David Sachs, advisor to the White House Crypto, supported the CRA on X.
Why is the broker DEFI Rules problematic?
The Crypto industry has opposed the Broker Defy Rules from the beginning, arguing that it is misunderstood how decentralized finance is operated. The rules believe that DEFI platforms act as middlemen, such as traditional brokers, colleague transactions to colleague transactions rather than front-end services.
https://crypto.news/irs-TARGETS- FEFI- Blockchain- Roups- Challenge-new- Broker-Riporting-Rool
Broker Defee Rules mistakenly suggest that Defy platforms (such as real brokers) serve as an intermediary among their counterparts. Rules do not understand that decentralized finance platforms act as front-end services that facilitate colleagues from colleagues, connect counterparts but do not control them.
Christin Smith of the Blockchain Association called the rule unconstitutional as it violates the Administrative Procedure Act and exceeds the Legislative Authority of the IRS and Treasury Department. Joint details The association, DEFI Education Fund, and Texas Blockchain Council cited the head of the Blockchain Association of Legal Marisa Copel, saying, “It is not only a violation of the privacy rights of individuals using decentralized technology, it will push this whole, buried technology abduction.”
The activists warned that this “midnight decision” of the Biden administration would cripple the DEFI sector, not only putting the burden on entrepreneurs, but is an existential threat to the industry. It is no wonder that the support of the White House to cancel the broker Defee rules was announced with great enthusiasm.
What is the possibility that the rule will be canceled?
The broker DEFI rule does not align with the pro-crypto trend of the current administration. It denies the goal of keeping the cryptocurrency sector private and free from government monitoring. Given that the Trump administration has clearly banned the development of central bank digital currencies, one vote to cancel the rule will suit its policy direction.
More than this, during his Presidential campaign in the summer of 2024, Trump promised tax relief from the US for crypto companies. Broker DEFI rule effectively push the US DEFI platforms due to unexpected demand to collect and share individual information from users. Keeping these facts in mind, there is a big opportunity to cancel the rule.
Additionally, the rule was presented by IRS, and Donald Trump expressed his wish. End IRS overall. The proposal of the concerned Earl Carter has already been made. However, it is very early to judge whether something like this happens. Nevertheless, this is another argument in favor of the high probability of CRA’s success initiated by Ted Cruise.
